Six months ago, as some of you might remember, DH and I were on the verge of splitting up. We’d had SO many fights over SO many things, we were both ready to toss in the towel. But we held on. Not merely held on, but we worked really hard to figure out where all the angst and anger and fear was coming from for both of us, and how to look those monsters right in the face and say “NO! We won’t let you run our lives anymore!” A lot of ghosts from mistakes our parents made, from events in the past, and/or from mistakes we made. What was the line from Ironman 3? We make our own demons? I truly believe that’s the case. But we waded through the worst of it and kept going. Now when a piece of farm equipment breaks down or we have some unexpected health bill (my dislocated collarbone has been a big problem the last few months), we can put that in context and think “yea, but we’re still together. And that’s something.”

I’ve already gone through one divorce, and yes there are times when both people would be much better off on their own. That was definitely the situation with my first marriage. But this time, we both knew we’d be positively miserable apart, so a breakup wouldn’t be in anyone’s best interests. Yet we had so many issues to work out, and we STILL have so many issues to work out. But we’re plugging away with it. We also have issues of our own to deal with, and sometimes those monsters seem too big to slay as well. It’s odd when the financial monsters seem tame by comparison, after having been so focused on the financial monsters for so long. But slay the big dragons and suddenly the little dragons don’t seem so bad. They just sort of hiss and spit out sparks, instead of laying waste to entire cities like Godzilla. So we’re in the “hissing and spitting out sparks” phase of things. We’re not quite to the “laughing at Murphy” yet, but we’ve moved well away from “the next straw is the LAST straw.” Not yet a comfortable place to be, but much improved over where we were.

What’s the line from the country song? “If you find yourself going through hell, keep on going!” Because there is a much easier, nice green pasture on the other side. Just keep plugging away and you’ll get there. In our case, we’ve made the decision to get there together. We’ll deal with whatever hissing-and-spitting mini-dragons we encounter along the way. And for that, I’m very very grateful.

This last weekend and we went traveling, blog to be posted on it soon. We didn’t go far, and we went on a shoestring using coupons, free camping, an annual pass, plus and loyalty cards on fuel. The trip was fun, but it made dh want to retire asap all the much more. I am so ready for him to, but the budget is not, at least not the way we want to retire.

Anyway, as we were driving home from errands yesterday we started discussing how blessed we have been during our life, and how with hard work and determination we have done so much more than many people will ever do in their life simply because of the choices they make.

Dh is one of 4 kids and I am one of two, we are both the oldest children in our families and the difference in our life style and those of our siblings is so huge. We, in our families, are the “Joneses” but not because of anything that has ever been handed to us.

There have been times in our life we have had a $.19 one pound bag of beans to feed the two of us on for a month so we could make certain our baby ate properly. We’ve been unemployed more times than I am comfortable with, and there was a time my husband was working one full time job and four part time jobs at the same time he was going back to school while I baby sat numerous children and was an extreme couponer to just make ends meet.

Murphy has been brutal to us at times, and God has been so wonderful at others. We discussed all this and more, and both feel we have a great adventure still laying before us, but if it should all end tomorrow we have our memories and no one can take those.

Why do I tell you this? Because I would like to challenge all of you, especially those who are really struggling to take the time out this weekend to discuss with your family all the blessings you have had as well. Once you start looking back, I think you will find you have had a very good life, and you too have a great adventure still ahead of you.

to the credit card every three days or to bring the balance to $0, I wouldn’t increase debt or even see a monthly bill (which I never would do). Of course, if no monthly bill, then how could my CC effort have any effect on my FICO score?

The great unknown is it’s impact on the FICO score, which former Evil Financial Empire employee (her words) Kathryn mentions that the impact will be slight. Kathryn, I save your email and will look at it again in five or so years when I go to get a home loan. Great advice!

On balance, having a snake in my hand that is looking for ways to bite me (Kathryn’s words again) in exchange for little positive impact (maybe even negative impact) on my FICO doesn’t sound like a good deal.

Instead of guessing, the better approach, per Kathryn, would be to approach a mortgage lender when I have the savings and not debt, and tell them I wanted to strengthen my position to get a really good loan package at some point in the future.

The last time I learned of my credit score was April 2010, and I think it was 710. I got a free copy of my credit report yesterday and it has one negative item (A Macy’s charge card where they never sent me a 2003 bill for $70 that I learned about way too late) and I have 31 accounts in good standing going back to September 1993 (Creditor’s loved me because they always made good money off me). It’s spooky to have my credit history going back almost 20 years (Is that normal? I heard most items drop off after ten years, so why does my credit report go back 20 years?)

We have been in more than one situation where a unique cet of circumstances aligned, and our BEF was not enough to cover a sudden unexpected occurrence. We had to get really really creative in order to get out of those situations without going into debt. Some were so serious that we actually put “get a line of credit” on the table as an option. We were so determined not to do that, that were able solve our problems without establishing new lines of credit. But I can think of at least two (more if I had longer to think) occasions where we wouldn’t have even thought about what to do if we had an open line of credit available to us. There would have been no need for the stress and strain involved in trying to find another way. I know we all think that won’t happen to us, but Murphy is an opportunist of the worst kind.
Good luck!

2015-09-07 / maradmin / Comments Off on PS – those credit score breakouts should be “between 600-750″, not “600-650″

We keep losing power today and I was trying to type this out for the second time before I lost it again. Got going too fast. But I just double-checked the rest of my numbers and they’re all what they should be. Also keep in mind that debt-to-income ratios have probably gotten more restrictive since the financial nightmare of the last few years. Lenders who were anxious to lend in my day, are now working from the “once burned twice shy” position. So those ratios might have changed. But the general principle still stands – anything that potentially boosts your debt payments per month is a bad thing. Anything that cuts your debt payments AND increases your savings (ie, your safety net) is a good thing. Focus on those two latter items, and forget the credit card. It won’t help you, and may actually hold you back.

Most folks here know that we’re currently farming for a living, but I used to be a mortgage lender (yes, I worked for the Evil Financial Empire back in the day). So this kind of question came up for us all the time. Here’s why I think this is a poor idea, and what you can do instead:

First, if the sole goal of your getting the credit card is to bump your credit score, it’s not quite that simple. The credit score is a compilation of many different aspects of your borrowing history over time, and simply getting one card won’t change it much, particularly while the card is still relatively new. The kinds of changes which bump folks from one “loan package” bracket to another are large enough that any one card won’t make the difference. I’d be more interested in what your current score was, and what sorts of financial events or borrowing history created the score. You didn’t mention if you had already checked your credit score, and if so, what it was. I haven’t done mortgage lending for awhile (I was most involved in the industry prior to 2005), but we’d roughly rank credit scores as follows:
-above 750 and the rest of the loan package looks good, give them the best loan package we had
-between 600-650 but the rest of the loan package looks good, give them near the best
-between 600-650 and the rest of the loan package is iffy, give them a higher interest rate
-less than 600, that loan package had better be stellar to get any loan at all. Here is where the reasons behind a credit score would start to matter. If it was a single catastrophic event, like a medical bankruptcy (ie, they went into the red because of medical issues), and that event is over and done with and they’re clawing their way back out, that was handled one way. But if the credit score shows a lifelong history of poor spending decisions and spending habits, they were given the “clean up your financial health” speech and sent on their way. So getting a credit card would only be a drop in the bucket for how we ranked that score.

Secondly, the MUCH bigger issue for us was the debt to income ratio. That ratio actually had two separate but related calculations. First, we looked at just the proposed mortgage payment, compared to total income. We wanted to see that mortgage payment less than 28% of the total income. So for instance, if your monthly income was $5000, your mortgage payment needed to be less than $1400. The higher that ratio went, the higher the interest rate went. Secondly, we also looked at ALL debt, compared to total income. Here again is where having a payment (or even a potential payment) on a credit card could sink you. We wanted to see a ratio of all debt (mortgage + any debt bills of any kind) well under 50% of the total income. So in our $5000/month example above, with a mortgage payment of $1400, you could only have another $1100 in debt. And here’s the kicker. Many lenders do not look at what your credit card payment CURRENTLY is. They look at what your credit card payment COULD be, if you maxed out the borrowed credit. This is why paying down the card every month won’t help you. We would look at what your total balance could be on that card, figure what the total payment could be, and use THAT figure to calculate your total possible debt payment. The bigger the card, the bigger that payment, regardless of whether you actually paid it off every month. Why? Because banks know that Mr. Murphy is alive and well, and that even when folks intend to pay off the balance every month, it’s all too easy to have something come along to trip up that good intention and result in a balance on that card. So, getting a card with the intention of paying it down every month won’t help you at all, and could be the difference between a good loan package and a poor one.

Finally, I’d emphasize that ALL of us here had good intentions when we got our various credit cards. Yet here we are, because life happens and credit cards get away from us. They’re wily little creatures, very slippery, and they have a life of their own. You’re in a very large group of “good-intentions” folks when you say you’ll pay down the card balance every month. Real world records would indicate that a very large percentage of that well-intentioned group can’t or don’t live up to that promise. At which point the credit card shows itself for what it is, not a tool for your benefit, but a snake in your hand that is looking for ways to bite you. Let credit card payback statistics demonstrate to you that many folks start off with good intentions, but can’t maintain them. Don’t repeat their mistake.

If I were still a mortgage lender, and you came to me and said you wanted to strengthen your position to get a really good loan package at some point in the future, here’s the advice I’d give:
– pay off that $20K debt, as fast as you can
– having zero in savings will SINK any loan application you try to turn in. That single factor right there is the biggest red flag I see. Even if you came to me with a great loan package and a great credit score, that zero in savings would force me to shove your application into the higher risk category. No savings = no safety net, so anything unexpected MUST become a debt because you didn’t have the resources to pay for it from savings. Start padding that savings account as much as you can, in tandem with paying down the debt.

The babysitting gig looks like it’s going to start earlier than originally planned, she’s doing a part time back to work stint next week which will put about $120 in my pocket.
On the one hand, this would cover gas in the cars for the week.
On the other hand, it would add to our severely depleted BS1 and take money at http://paydayloansfloridaonline.biz
On the other hand, it would go a long way to getting one of our credit cards “current” (Walmart, the “lateness” is all late fees, we’re actually current on the required minimum base payment), or paying off other credit cards.
It’s not this $120 per se that I am stressing over (honestly, this one is likely going to go towards gas for the cars.) It’s what do I do going forward? I don’t want to get to the end of a month, realize I earned $800 in cash and have nothing to show for it (debt reduction or BEF)
I’m not very good at planning my cash spending, especially when it comes in dribs and drabs.
What do you all do?

I have our budget in excell and I can easily do a “save as” for next month’s budget, which is what I usually do. There is not a lot of change from month to month, mostly just a tweak here or there.

We have added in mowing for every other week. I had suggested it to dh and he had not said much, then a few weeks ago said he needed $$ to pay the guy to mow. I was like, “what? we finalized that?” I had begun to put a little back per month for next year. Now that we have given ourselves a raise, as of July 1 (first raise in years), it was easier. (The biggest % is added to the mortgage to the extra we were already paying.) So we are allowing for that every other week. I plan on stashing some every month even in the off season for mowing. Hopefully that will get us far enough ahead that we can do it every week next year. dh is mowing on the weeks that the guy does not come. It gives some relief because some weeks he has something almost every night.

We went out of town last week for a business trip. We went to Red Wing, Minnesota to learn more about how Red Wing boots are made. This will hopefully help us sell more RW boots. This learning trip hits the pocket book in the long run in a good way if sales go up. RW paid for the whole trip. (We had to kick in for one of the airline tickets, parking our vehicle and food at the airport (YUCK), and for the occasional snack/coffee when not in a meeting. We had as much fun as we could considering we were in meetings the bulk of each day. We did not get home till about 1:00 AM Friday, due to late flight home. Red Wing had the meals catered and the meat portion was tender but let me add—no disrespect intended ….—all the food definitely needs some flavor. We are used to food flavored generously where we live. Our food is not necessarily “hot” as in red pepper, but plenty of spices are used. I was so glad to get home to some salt and pepper, and I don’t mean the band!!! LOL

So right now we are in pretty good shape. We are blessed and know that though we cannot meet all our goals right now, we are in much better shape than we would be without DR’s help.

It’s so hard to budget future needs with the cost of health care & insurance such an unknown. We are super conservative with spending and saving – so I look at that and think we need to go to 2% for be sure. J

We would like to travel, wouldn’t downsize any time soon… We live off our income, but we save a lot of it too. No pensions (do anyone but government employees get that these days? J) and I hate to even rely on Social Security in future.

but that will depend on many factors. It is hard to know what costs will be 30 years from now. Taxes and Insurance will go up, but if you downsize, you can estimate most costs. Will you travel? Do you have expensive hobbies? If you can live off what you are making now, go with that estimate. When you turn 60, you will buy Long Term Health Insurance.

So if you have $1,000,000, you should be able to live off of $40,000. You will have some SS and possibly a pension as well. It won’t hurt if you draw $50,000 in good years, but you won’t want to draw $100,000 in a year.

I’ve seen suggestions to save 15 to 20 times whatever income you’ll in retirement. So if you think you’ll need $30,000 per year, you’ll need to save $450,000 to $600,000 by retirement. But that’s just a base calculation to get you started…

And remember, Financial independence is where the interest your money earns is greater than your expenses, no matter where/when that may be.
If your expenses are $30,000/year, and you can get 8% on your savings, then you’d need $375,000 invested. If you can get by on $20,000, then you’d only need $250,000 at that same 8% in order to be Financially Independent. If you are able to save that amount by age 50, then you’d be FI, and you can choose to work, or retire – your choice.

Hi all, I am wondering if some of you out there can give some retirement advice and information.
Basically, I am wondering when one knows that they have enough to retire. What advice/formulas, books or experts (besides DR) have you been using to make that decision. One big concern will be Health insurance.

My DH and I are still in our 40’s, but we have been saving since we left college and have never really carried a debt outside our mortgage. We have money saved for retirement, investments, and kids college. Our only debt is our mortgage which has an excellent rate (less than 3%) and we owe less than 30% of its value.

I’m just wondering how to know when enough is enough and what our goals should be.

2015-03-21 / maradmin / Comments Off on I am really trying to stay positive and live in gratitude

I am grateful that we are able to find the money to cover all these emergencies lately. I am.

But the other part of me is going: geez. The $2,500 I spent buying the 4Runner when the Saturn died, I could have paid off Comerica. The $500 deductible from the accident? Could have paid off Capital One (almost.) The $450 I’m now going to have to spend covering DS’s TMobile stunt (even if he pays for it eventually)? Could have paid off WalMart.

So the point of this is (besides me whining): It’s really like Dave says! He uses the example if your kid needed a life or death operation and you had to come up with $5k, you’d come up with the money. But we fail to be THAT (gazelle) INTENSE when it comes to getting out of debt.

These past few months have shown me that I need to be more proactive about finding another income stream. The child care gig is just not going to cut it. I get that they are freaking out at the idea of spending $800 a month, but I can’t continue to keep my life on hold for them if they’re not going to commit to the 20 hours a week like they said they were.

So I’ve been hitting the cyber streets applying for jobs and more child care gigs.

The Honda Pilot is back in the shop, this time the transmission place. This is the one which was rear-ended. Fortunately, the tranny guy is leaning toward the damage occurred as a result of the accident, so as soon as the insurance company agrees, we can go rent another car & they’ll pick up the cost. But in the mean time, it’s catch as catch can.

Then I went to go pay the cell phone bill and got the shock of my life: $911 !! Granted that included the $160 which was “due” a week ago, the $140 “due now” and the $100 in restoration charges but that still left a huge whopping amount unaccounted for.

I won’t over bore you with details. It turns out my youngest created an Instagram account which my kids aren’t allowed to have (long story, it’s a good reason why), then “some girl” contacted him via Instagram, he gave “her” his phone number and they’ve been texting to the tune of 2000 text messages at .20 each because the number is in Canada.

GOOD NEWS: I paid $200 today ( I was already planning on paying $160), TMobile waived all my restoration fees and late charges ($120), aren’t going to charge me a late fee for $150 “due now” if I pay by August 17th, and took the rest (about $500) and split in to interest free 5 monthly payments.

So it’s going to be ugly for the next 5 months and DS14 is going to be scrounging yard work jobs to help pay it off, but it could have been a lot lot worse.

Including the fact that he and i had a conversation about how this is how (usually) teenager (girls) disappear. “Some 15 yo guy” friends them on FB or IG, phone numbers are exchanged. texts happen and before you know it, plans are made to meet in the middle of the night and your kid is gone forever because the “15 yo on the other end” is really some 55 year old pidophil. On top of some stuff that happened at the campout, DS14 has decided I’m not such a stupid, unreasonable mother after all.